Needham, MA, August 10, 1999 - CareMatrix Corporation (NASDAQ: CMDC), a fully integrated assisted living company, today reported a 52% increase in net earnings to $6.3 million, or $0.34 per share from $4.2 million, or $0.23 per share for the same quarter in 1998. Revenues increased 56.8% to $53.6 million from $34.2 million for the same quarter last year.

Net earnings for the first six months of 1999 were $12.2 million, or $0.66 per share, compared to net earnings of $7.5 million, or $0.42 per share for the same period in 1998. Revenues increased 63.4% to $104.3 million from $63.8 million for the same period a year ago.

On July 22, 1999 the Company announced that its Board of Directors instructed management to explore strategic alternatives that would maximize shareholder value. Mr. Gosman stated, "We have engaged DeutscheBancAlex.Brown and PaineWebber Incorporated as financial advisors for the Company. Also, a special committee of the Board of Directors has appointed Chase Manhattan Bank in conjunction with issuing a Fairness Opinion for the benefit of our shareholders."

He further commented, "There has been a great deal of interest generated since the announcement that the Company would seek strategic alternatives; such as, a sale of the company, leveraged recapitalization, or financial equity sponsor. We are optimistic that we will be able to complete this process in the most efficient and timely manner."

CareMatrix operates 61 communities in 18 states with 7,400 units, which compares to 34 facilities in operation with 3,839 units for the second quarter of 1998. The Company currently has 18 properties under construction with 2,062 units, and continues to maintain a pipeline of properties at different stages of development.

The average occupancy rate for CareMatrix stabilized assisted living communities for the second quarter was 94%, up slightly from the 93.2% Company reported for the comparable period last year.

Operating margins for stabilized assisted living facilities are 40.0% compared to 38.9% in the second quarter of 1998.

CareMatrix Corporation is a leading provider of senior housing services including assisted living, supportive independent living and specialized programs for people with Alzheimer's disease.

This release contains forward-looking statements regarding the Company's future plans, operations and prospects. The Company's actual results could differ materially from the results anticipated in these forward looking statements as a result of uncertainties, including risks relating to demand, pricing, competition, construction, and other factors identified in the Company's filings with the Securities and Exchange Commission.

Three Months Ended

June 30, 1999

June 30, 1998

June 30, 1999

June 30, 1998

Residence operations

45,813,881

28,242,530

90,095,993

51,990,896

Development fees

7,765,582

5,924,116

14,201,304

11,821,453

Total revenue

53,579,463

34,166,646

104,297,297

63,812,349

Operating expenses:

Facility operating expenses

29,020,943

17,542,988

55,347,773

33,009,898

Facility lease expense

4,922,355

4,026,034

10,165,299

7,725,901

General and administrative

5,114,130

5,087,304

10,288,915

9,551,440

Depreciation and amortization

Total operating expenses

Earnings from operations

12,004,890

6,644,934

23,806,026

11,924,266

Interest income(expense):

Interest and other income

2,098,209

2,162,404

3,560,832

4,491,346

Interest expense

3,672,270

1,828,582

7,187,814

3,666,710

Total other income(expense)

Earnings before income taxes and preferred dividends

10,430,835

6,978,756

20,179,044

12,748,902

Income taxes

4,120,179

2,826,396

7,970,722

5,226,777

Earnings before preferred dividends

6,310,656

4,152,360

12,208,322

7,522,125

Preferred Dividends

1,775

1,825

3,600

6,400

Net earnings

$6,308,881

$4,150,535

$12,204,722

$7,515,725

Diluted earnings per share

$0.34

$0.23

$0.66

$0.42

Diluted shares outstanding

21,980,216

18,106,195

22,182,101

18,095,732

Basic earnings per share

$0.35

$0.23

$0.68

$0.43

Basic shares outstanding

17,938,288

17,665,463

17,975,224

17,521,463